Lebanese parliament approves new government


Elias Sakr
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Lebanon’s newly appointed Cabinet secured a vote of confidence from parliament on Monday, paving the way for billionaire prime minister Najib Mikati to pursue long due reforms to tackle the country’s financial meltdown.

The financial crisis left its mark on the parliamentary session, delaying it by an hour due to a power outage, a frequent theme across a country suffering from acute fuel shortages.

Lawmakers waited outside the main chamber for power to be restored to the building before Speaker Nabih Berri kicked off the meeting to debate the Cabinet’s policy statement.

The government of Mr Mikati, the third prime minister to be designated to lead a cabinet after nearly a year of political paralysis, won the support of a large majority.

85 lawmakers voted for the government including members of the Iran-backed Hezbollah, its Shiite ally Speaker Nabih Berri’s Amal Movement, the Future Movement (FM) led by former premier Saad Hariri, the country’s top Muslim Sunni official, and the Free Patriotic Movement (FPM), the largest Christian party founded by the president and currently led by his son-in-law Gebran Bassil.

Fifteen independent MPs and lawmakers affiliated with the Lebanese Forces, the FPM’s political rivals and second largest Christian party, opposed the Cabinet.

The vote of confidence followed interventions by lawmakers who debated the Cabinet’s policy statement.

Mr Mikati was urged by speaker Mr Berri to quickly finish his remarks to allow enough time for lawmakers to discuss the Cabinet’s policy statement before the vote of confidence was held.

“We restored electricity but we’re not sure it is sustainable,” Mr Berri said.

The new Cabinet will seek to resume negotiations with the IMF and would give priority to boosting the state’s power supply, Mr Mikati told lawmakers.

But Hezbollah MP Hassan Fadlallah said any agreement with the IMF should be negotiated, cautioning the government against adopting a “pre-defined” deal.

A close ally of Hezbollah, Mr Bassil said his bloc would vote for the Cabinet to pursue anticorruption reforms in line with its policy statement.

Mr Bassil had previously refrained from nominating Mr Mikati to serve as prime minister for the post, arguing that his support for the Cabinet was conditional on its makeup and programme.

Mr Mikati replaced Mr Hariri who stepped down after nine months of bickering with President Michel Aoun over the Cabinet lineup. The political deadlock plunged the country further into crisis.

Future Movement MP Bahia Hariri told lawmakers her party was backing the government to “save” the country.

The vote of confidence came less than a week after ministers approved a policy statement that says the government is committed to the implementation of reforms, a key condition of international powers and the International Monetary Fund to unlock financial support.

Prior to the vote, LF MP Antoine Habshi took aim at the cabinet, saying it represents the political class responsible for Lebanon’s current economic woes. He also criticised Mr Mikati’s failure to condemn Hezbollah’s import of Iranian fuel into Lebanon through illegitimate channels last week.

Lebanon’s crisis has worsened in recent months with fuel shortages and power cuts crippling various industries. Clashes have erupted over the lack of petrol and diesel to power generators.

The worsening shortages follow the central bank's decision to cut subsidies of vital imports of oil, petrol and diesel to protect its dwindling foreign currency reserves.

The state-owned power company has been rationing its supply of electricity to a daily maximum of two hours.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

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Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

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There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

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Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

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Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

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Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

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Favourite book: ‘Purpose Driven Life’ by Rick Warren

Favourite travel destination: Switzerland

Hobbies: Travelling and following motivational speeches and speakers

Favourite place in UAE: Dubai Museum

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Men’s:
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Favourite food: “I'm a vegetarian, so I can't get enough of salad.”

Favourite film:  “I love watching documentaries, and am fascinated by nature, animals, human anatomy. I love watching to learn!”

Best spot in the UAE: “I fell in love with Fujairah and anywhere outside the big cities, where I can get some peace and get a break from the busy lifestyle”

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Richard Flanagan
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Ahmed Raza

UAE cricket captain

Age: 31

Born: Sharjah

Role: Left-arm spinner

One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95

T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28

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Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

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  • Debate the issue, don't attack the person
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  • Avoid assumptions, seek understanding, ask questions
Updated: September 20, 2021, 6:20 PM